insurance account rules 2016€¦ · instructions affecting the statutory statement of capital and...

INSURANCE ACCOUNT RULES 2016

SCHEDULES

(paragraphs 2, 8, 9, 10, 12, 14)

The following Schedules, referred to in paragraphs 2, 8, 9, 10, 12 and 14, have been omittedfrom these Rules and published on the Authority’s website www.bma.bm, in accordance withsection 6A(8) of the Insurance Act 1978—

SCHEDULE IContent of Statutory Financial StatementsSCHEDULE IINotes to Statutory Financial StatementsSCHEDULE IIIInstructions Affecting the Statutory Financial StatementsSCHEDULE IVInstructions Affecting the Statutory Balance SheetSCHEDULE VInstructions Affecting the Statutory Statement of IncomeSCHEDULE VIInstructions Affecting the Statutory Statement of Capital and SurplusSCHEDULE VIIMinimum Margin of Solvency for General BusinessSCHEDULE VIIIMinimum Margin of Solvency for Long-Term BusinessSCHEDULE IXCondensed General Purpose Financial StatementsSCHEDULE XNotes to Condensed Consolidated General Purpose Financial StatementsSCHEDULE XIInstructions Affecting the Condensed General Purpose Financial Statements

Made this 3rd day of March 2016

ChairmanThe Bermuda Monetary Authority

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SCHEDULE I CONTENT OF STATUTORY FINANCIAL STATEMENTS

Form 1SFS

STATUTORY BALANCE SHEET

[blank] name of Company as at [blank] (day/month/year)

expressed in [blank] (currency used (Rule 7))

(A) (B) (C) (D) (E) (F)

General Business Long-Term Business

General and Long-Term Business

UNCONSOLIDATED UNCONSOLIDATED CONSOLIDATED ASSETS Line No

20XX 20XX-1 20XX 20XX-1 20XX 20XX-1

1. CASH AND CASH EQUIVALENTS XXX XXX XXX XXX XXX XXX

2. QUOTED INVESTMENTS:

(a) Bonds and Debentures

(i) Held to maturity XXX XXX XXX XXX XXX XXX

(ii) Other XXX XXX XXX XXX XXX XXX

(b) Total Bonds and Debentures XXX XXX XXX XXX XXX XXX

(c) Equities

(i) Common stocks XXX XXX XXX XXX XXX XXX

(ii) Preferred stocks XXX XXX XXX XXX XXX XXX

(iii) Mutual funds XXX XXX XXX XXX XXX XXX

(d) Total equities XXX XXX XXX XXX XXX XXX

(e) Other quoted investments XXX XXX XXX XXX XXX XXX

(f) Total quoted investments XXX XXX XXX XXX XXX XXX

3. UNQUOTED INVESTMENTS:


(i) Held to maturity XXX XXX XXX XXX XXX XXX

(ii) Other XXX XXX XXX XXX XXX XXX

(b) Total Bonds and Debentures XXX XXX XXX XXX XXX XXX

(c) Equities

(i) Common stocks XXX XXX XXX XXX XXX XXX

(ii) Preferred stocks XXX XXX XXX XXX XXX XXX

(iii) Mutual Funds XXX XXX XXX XXX XXX XXX

(d) Total equities XXX XXX XXX XXX XXX XXX

(e) Other unquoted investments XXX XXX XXX XXX XXX XXX

(f) Total unquoted investments XXX XXX XXX XXX XXX XXX


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4. INVESTMENTS IN AND ADVANCES TO AFFILIATES

(a) Unregulated entities that conduct ancillary services XXX XXX XXX XXX XXX XXX

(b) Unregulated non-financial operating entities XXX XXX XXX XXX XXX XXX

(c) Unregulated financial operating entities XXX XXX XXX XXX XXX XXX

(d) Regulated non-insurance financial operating entities XXX XXX XXX XXX XXX XXX

(e) Regulated insurance financial operating entities XXX XXX XXX XXX XXX XXX

(f) Total investments in affiliates XXX XXX XXX XXX XXX XXX

(g) Advances to affiliates XXX XXX XXX XXX XXX XXX

(h) Total investments in and advances to affiliates XXX XXX XXX XXX XXX XXX

5. INVESTMENTS IN MORTGAGE LOANS ON REAL ESTATE:

(a) First liens XXX XXX XXX XXX XXX XXX

(b) Other than first liens XXX XXX XXX XXX XXX XXX

(c) Total investment in mortgage loans on real estate XXX XXX XXX XXX XXX XXX

6. POLICY LOANS XXX XXX XXX XXX

7. REAL ESTATE:

(a) Occupied by the company (less encumbrances) XXX XXX XXX XXX XXX XXX

(b) Other properties (less encumbrances) XXX XXX XXX XXX XXX XXX

(c) Total real estate XXX XXX XXX XXX XXX XXX

8. COLLATERAL LOANS XXX XXX XXX XXX XXX XXX

9. INVESTMENT INCOME DUE AND ACCRUED XXX XXX XXX XXX XXX XXX

10. ACCOUNTS AND PREMIUMS RECEIVABLE

(a) In course of collection XXX XXX XXX XXX XXX XXX

(b) Deferred – not yet due XXX XXX XXX XXX XXX XXX (c) Receivables from retrocessional contracts XXX XXX XXX XXX XXX XXX (d) Total accounts and premiums receivable XXX XXX XXX XXX XXX XXX 11. REINSURANCE BALANCES

RECEIVABLE

(a) Foreign affiliates XXX XXX XXX XXX XXX XXX

(b) Domestic affiliates XXX XXX XXX XXX XXX XXX

(c) Pools & associations XXX XXX XXX XXX XXX XXX

(d) All other insurers XXX XXX XXX XXX XXX XXX

(e) Total reinsurance balance receivable XXX XXX XXX XXX XXX XXX


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12. FUNDS HELD BY CEDING REINSURERS XXX XXX XXX XXX XXX XXX

13. SUNDRY ASSETS:

(a) Derivative instruments XXX XXX XXX XXX XXX XXX

(b) Segregated accounts – Long-Term business – variable annuities XXX XXX XXX XXX

(c) Segregated accounts - Long-Term business - other XXX XXX XXX XXX

(d) Segregated accounts - General business XXX XXX XXX XXX

(e) Deposit assets XXX XXX XXX XXX XXX XXX

(f) Deferred acquisition costs XXX XXX XXX XXX XXX XXX

(g) Net receivables for investments sold XXX XXX XXX XXX XXX XXX

(h) Other sundry assets 1 (specify) XXX XXX XXX XXX XXX XXX

(i) Other sundry assets 2 (specify) XXX XXX XXX XXX XXX XXX

(j) Other sundry assets 3 (specify) XXX XXX XXX XXX XXX XXX

(k) Total sundry assets XXX XXX XXX XXX XXX XXX

14. LETTERS OF CREDIT, GUARANTEES AND OTHER INSTRUMENTS

(a) Letters of credit XXX XXX XXX XXX XXX XXX

(b) Guarantees XXX XXX XXX XXX XXX XXX

(c) Other instruments XXX XXX XXX XXX XXX XXX

(d) Total letters of credit, guarantees and other instruments XXX XXX XXX XXX XXX XXX

15. TOTAL XXX XXX XXX XXX XXX XXX

TOTAL INSURANCE RESERVES, OTHER LIABILITIES AND STATUTORY CAPITAL AND SURPLUS

16. UNEARNED PREMIUM RESERVE XXX XXX XXX XXX XXX XXX

(a) Gross unearned premium reserves XXX XXX XXX XXX

(b) Less: Ceded unearned premium reserve

(i) Foreign affiliates XXX XXX XXX XXX

(ii) Domestic affiliates XXX XXX XXX XXX

(iii) Pools & associations XXX XXX XXX XXX

(iv) All other reinsurers XXX XXX XXX XXX

(c) Total ceded unearned premium reserve XXX XXX XXX XXX

(d) Net unearned premium reserves XXX XXX XXX XXX

17. LOSS AND LOSS EXPENSE PROVISIONS

(a) Gross loss and loss expense provisions XXX XXX XXX XXX


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(b) Less: Reinsurance recoverable balance




(iv) All other reinsurers XXX XXX XXX XXX

(c) Total reinsurance recoverable balance XXX XXX XXX XXX

(d) Net loss and loss expenses provisions XXX XXX XXX XXX

18. OTHER INSURANCE GENERAL BUSINESS RESERVES XXX XXX XXX XXX

19. TOTAL GENERAL BUSINESS INSURANCE RESERVES XXX XXX XXX XXX

LONG-TERM BUSINESS INSURANCE TECHNICAL PROVISIONS

20. RESERVE FOR REPORTED CLAIMS XXX XXX XXX XXX

21. RESERVE FOR UNREPORTED CLAIMS XXX XXX XXX XXX

22. POLICY RESERVES - LIFE XXX XXX XXX XXX

23. POLICY RESERVES – ACCIDENT AND HEALTH XXX XXX XXX XXX

24. POLICYHOLDERS’ FUNDS ON DEPOSIT XXX XXX XXX XXX

25. LIABILITY FOR FUTURE POLICYHOLDERS’ DIVIDENDS XXX XXX XXX XXX

26. OTHER LONG-TERM BUSINESS INSURANCE RESERVES XXX XXX XXX XXX

27. TOTAL LONG-TERM BUSINESS INSURANCE RESERVES

(a) Total gross long-term business insurance reserves XXX XXX XXX XXX

(b) Less: Reinsurance recoverable balance on long-term business




(iv) All other insurer XXX XXX XXX XXX

(c) Total reinsurance recoverable balance XXX XXX XXX XXX (d) Total net long-term business insurance

reserves XXX XXX XXX XXX

OTHER LIABILITIES

28. INSURANCE AND REINSURANCE BALANCES PAYABLE XXX XXX XXX XXX XXX XXX

29. COMMISSIONS, EXPENSES, FEES AND TAXES PAYABLE XXX XXX XXX XXX XXX XXX


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30. LOANS AND NOTES PAYABLE XXX XXX XXX XXX XXX XXX

31. (a) INCOME TAXES PAYABLE XXX XXX XXX XXX XXX XXX

(b) DEFERRED INCOME TAXES XXX XXX XXX XXX XXX XXX

32. AMOUNTS DUE TO AFFILIATES XXX XXX XXX XXX XXX XXX

33. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES XXX XXX XXX XXX XXX XXX

34. FUNDS HELD UNDER REINSURANCE CONTRACTS XXX XXX XXX XXX XXX XXX

35. DIVIDENDS PAYABLE XXX XXX XXX XXX XXX XXX

36. SUNDRY LIABILITIES:

(a) Derivative instruments XXX XXX XXX XXX XXX XXX

(b) Segregated accounts companies XXX XXX XXX XXX XXX XXX

(c) Deposit liabilities XXX XXX XXX XXX XXX XXX

(d) Net payable for investments purchased XXX XXX XXX XXX XXX XXX

(e) Other sundry liabilities 1 (specify) XXX XXX XXX XXX XXX XXX

(f) Other sundry liabilities 2 (specify) XXX XXX XXX XXX XXX XXX

(g) Other sundry liabilities 3 (specify) XXX XXX XXX XXX XXX XXX

(h) Total sundry liabilities XXX XXX XXX XXX XXX XXX


(a) Letters of credit XXX XXX XXX XXX XXX XXX

(b) Guarantees XXX XXX XXX XXX XXX XXX

(c) Other instruments XXX XXX XXX XXX XXX XXX

(d) Total letters of credit, guarantees and other instruments XXX XXX XXX XXX XXX XXX

38. TOTAL OTHER LIABILITIES XXX XXX XXX XXX XXX XXX

39. TOTAL INSURANCE RESERVES AND OTHER LIABILITIES XXX XXX XXX XXX XXX XXX

STATUTORY CAPITAL AND SURPLUS

40. TOTAL STATUTORY CAPITAL AND SURPLUS XXX XXX XXX XXX XXX XXX

41. TOTAL XXX XXX XXX XXX XXX XXX


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Form 2SFS

STATUTORY STATEMENT OF INCOME



(A) (B) (C) (D) (E) (F)



UNCONSOLIDATED UNCONSOLIDATED CONSOLIDATED Line No

20XX 20XX-1 20XX 20XX-1 20XX 20XX-1

GENERAL BUSINESS UNDERWRITING INCOME

1. GROSS PREMIUMS WRITTEN

(a) Direct gross premiums written XXX XXX XXX XXX

(b) Assumed gross premiums written XXX XXX XXX XXX

(c) Total gross premiums written XXX XXX XXX XXX

2. REINSURANCE PREMIUMS CEDED XXX XXX XXX XXX

3. NET PREMIUMS WRITTEN XXX XXX XXX XXX

4. INCREASE (DECREASE) IN UNEARNED PREMIUMS XXX XXX XXX XXX

5. NET PREMIUMS EARNED XXX XXX XXX XXX 6. OTHER INSURANCE INCOME XXX XXX XXX XXX 7. TOTAL GENERAL BUSINESS

UNDERWRITING INCOME XXX XXX XXX XXX GENERAL BUSINESS UNDERWRITING

EXPENSES 8. NET LOSS INCURRED AND NET LOSS

EXPENSES INCURRED XXX XXX XXX XXX 9. COMMISSIONS AND BROKERAGE XXX XXX XXX XXX 10. TOTAL GENERAL BUSINESS

UNDERWRITING EXPENSES XXX XXX XXX XXX 11. NET UNDERWRITING PROFIT (LOSS)

– GENERAL BUSINESS XXX XXX XXX XXX LONG-TERM BUSINESS INCOME 12. GROSS PREMIUMS AND OTHER

CONSIDERATIONS: (a) Direct gross premiums and other

considerations XXX XXX XXX XXX (b) Assumed gross premiums and other

considerations XXX XXX XXX XXX (c) Total gross premiums and other XXX XXX XXX XXX


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considerations

13. PREMIUMS CEDED XXX XXX XXX XXX 14. NET PREMIUMS AND OTHER

CONSIDERATIONS: (a) Life XXX XXX XXX XXX (b) Annuities XXX XXX XXX XXX (c) Accident and Health XXX XXX XXX XXX (d) Total net premiums and other

considerations XXX XXX XXX XXX 15. OTHER INSURANCE INCOME XXX XXX XXX XXX 16. TOTAL LONG-TERM BUSINESS

INCOME XXX XXX XXX XXX LONG-TERM BUSINESS DEDUCTIONS

AND EXPENSES

17. CLAIMS - LIFE XXX XXX XXX XXX 18. POLICYHOLDERS’ DIVIDENDS XXX XXX XXX XXX 19. SURRENDERS XXX XXX XXX XXX 20. MATURITIES XXX XXX XXX XXX 21. ANNUITIES XXX XXX XXX XXX 22. ACCIDENT AND HEALTH BENEFITS XXX XXX XXX XXX 23. COMMISSIONS XXX XXX XXX XXX 24. OTHER XXX XXX XXX XXX 25. TOTAL LONG-TERM BUSINESS

DEDUCTIONS AND EXPENSES XXX XXX XXX XXX 26. INCREASE (DECREASE) IN POLICY

RESERVES (ACTUARIAL LIABILITIES): (a) Life XXX XXX XXX XXX (b) Annuities XXX XXX XXX XXX (c) Accident and Health XXX XXX XXX XXX (d) Total increase (decrease) in policy

reserves XXX XXX XXX XXX 27. TOTAL LONG-TERM BUSINESS

EXPENSES XXX XXX XXX XXX 28. NET UNDERWRITING PROFIT (LOSS)

– LONG-TERM BUSINESS XXX XXX XXX XXX 29. COMBINED NET UNDERWRITING

RESULTS BEFORE THE UNDERNOTED ITEMS

XXX XXX XXX XXX XXX XXX

UNDERNOTED ITEMS 30. COMBINED OPERATING EXPENSE (a) General and administration XXX XXX XXX XXX XXX XXX (b) Personnel cost XXX XXX XXX XXX XXX XXX


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(c) Other XXX XXX XXX XXX XXX XXX (d) Total combined operating expenses XXX XXX XXX XXX XXX XXX 31. COMBINED INVESTMENT INCOME -

NET XXX XXX XXX XXX XXX XXX 32. COMBINED OTHER INCOME

(DEDUCTIONS) XXX XXX XXX XXX XXX XXX 33. COMBINED INCOME BEFORE TAXES XXX XXX XXX XXX XXX XXX 34. COMBINED INCOME TAXES (IF

APPLICABLE): (a) Current XXX XXX XXX XXX XXX XXX (b) Deferred XXX XXX XXX XXX XXX XXX (c) Total XXX XXX XXX XXX XXX XXX 35. COMBINED INCOME BEFORE

REALIZED GAINS (LOSSES) XXX XXX XXX XXX XXX XXX 36. COMBINED REALIZED GAINS

(LOSSES) XXX XXX XXX XXX XXX XXX 37. COMBINED INTEREST CHARGES XXX XXX XXX XXX XXX XXX 38. NET INCOME XXX XXX XXX XXX XXX XXX


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Form 8SFS STATUTORY STATEMENT OF CAPITAL AND SURPLUS

[blank] name of Company

as at [blank] (day/month/year) expressed in [blank] (currency used (Rule 7))

(A) (B) (C) (D) (E) (F)



UNCONSOLIDATED UNCONSOLIDATED CONSOLIDATED Line No

20XX 20XX-1 20XX 20XX-1 20XX 20XX-1

1. STATUTORY CAPITAL:

(a) Capital stock XXX XXX XXX XXX

(i) Common shares: Authorized shares of par value each issued and fully paid shares

XXX XXX

(ii) (A) Preferred shares: Authorized shares of par value each issued and fully paid shares

XXX XXX

Aggregate liquidation values for

20XX XXX

20XX-1 XXX

(B) Preferred shares issued by a subsidiary: Authorized shares of par value each issued and fully paid shares

XXX XXX

Aggregate liquidation values for

20XX XXX

20XX-1 XXX

(iii) Treasury shares: Repurchased shares of par value each issued

XXX XXX

(b) Contributed surplus XXX XXX XXX XXX XXX XXX (c) Any other fixed capital (i) Hybrid capital instruments XXX XXX XXX XXX XXX XXX (ii) Guarantees and others XXX XXX XXX XXX XXX XXX (iii) Total any other fixed capital XXX XXX XXX XXX XXX XXX (d) Total Statutory Capital XXX XXX XXX XXX XXX XXX 2. STATUTORY SURPLUS:

(a) Statutory Surplus — Beginning of Year XXX XXX XXX XXX XXX XXX (b) Add: Income for the year XXX XXX XXX XXX XXX XXX (c) Less: Dividends paid and payable XXX XXX XXX XXX XXX XXX (d) Add (Deduct) change in unrealized

appreciation (depreciation) of XXX XXX XXX XXX XXX XXX


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investments

(e) Add (Deduct) change in non-admitted assets XXX XXX XXX XXX XXX XXX

(f) Add (Deduct) change in appraisal of real estate XXX XXX XXX XXX XXX XXX

(g) Add (Deduct) change in any other statutory surplus XXX XXX XXX XXX XXX XXX

(h) Statutory Surplus — End of Year XXX XXX XXX XXX XXX XXX 3. MINORITY INTEREST XXX XXX XXX XXX XXX XXX 4. TOTAL STATUTORY CAPITAL AND

SURPLUS XXX XXX XXX XXX XXX XXX


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SCHEDULE II

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTES TO FORM 1SFS

The notes to the statutory balance sheet on an unconsolidated basis shall include the following, and any other information which in the opinion of the directors is required to be disclosed if the statutory financial statements are not to be misleading -

Line 13 (a) The nature and terms of these assets; and (b) For derivatives and embedded derivatives, if any, the following must be disclosed—

(i) a description of the policies surrounding the use of derivatives; and

(ii) market value and nominal exposure of each derivative by issuer with nominal exposure greater than 5% of the aggregate sum of the total quoted and unquoted investments. Disclosure should be separated between long and short positions.

Line 15 (a) Total assets: The details of the total encumbered assets not securing

policyholder obligations, including asset type, purpose of encumbrance, and amount shall be included.

Assets Type Purpose of encumbrance Amount of encumbrance

Cash XXX Total quoted investments XXX Total unquoted investments XXX Funds held by ceding reinsurers

XXX

Other asset types XXX Total assets encumbered XXX

(b) The total encumbered assets for securing policyholder obligations,

including asset type and amount shall be included.

Assets Type Amount of encumbrance Cash XXX Total quoted investments XXX Total unquoted investments XXX Funds held by ceding reinsurers

XXX

Other asset types XXX Total assets encumbered XXX

Line 36 (a) The nature of these liabilities and the repayment terms; (b) For derivatives and embedded derivatives, if any, the following must be disclosed—



Line 37 Letters of credit, guarantees and other instruments: The discount rate


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or rates used in any present value calculations and the aggregate undiscounted value of liabilities or contingent liabilities shall be disclosed.

Line 17 The following must be disclosed in the notes to the statutory financial statements- (a) Movements in the loss and loss expense provisions for the current

year and previous year as per the table below. (b) Reasons for the change in the net losses incurred and net loss

expenses incurred related to prior years and indicate whether additional premiums or return premiums have been accrued as a result of the prior year effects.

(c) For the loss and loss expense provisions the following must be

disclosed, if any—

(i) total restricted assets - an amount equal to the value of all that are held for security or collateral against a liability or contingent liability; and

(ii) unsecured policyholder obligations - an amount equal to all policyholder obligations that are not secured by assets or collateral.

Line 17 General Business Reserves 20XX 20XX-1 Gross loss and loss expense provisions at beginning of year XXX XXX Less: Reinsurance recoverable at beginning of year (XXX) (XXX) Net loss and loss expense provisions at beginning of year XXX XXX Net losses incurred and net loss expenses incurred related to:

(a) Current year XXX XXX (b) Prior years XXX XXX

Total net losses incurred and net loss expenses incurred XXX XXX Less: Losses and loss expenses paid or payable related to:

(a) Current year XXX XXX (b) Prior years XXX XXX

Total losses and loss expenses paid or payable XXX XXX Net loss and loss expense provisions at end of year (XXX) (XXX) Add: Reinsurance recoverable at end of year XXX XXX Gross loss and loss expense provisions at end of year XXX XXX

Line 27 For the long-term business insurance reserves the following must be

disclosed, if any— (a) Total restricted assets - an amount equal to the value of all assets

that are held for security or collateral against a liability or contingent liability; and

(b) Unsecured policyholder obligations - an amount equal to all

policyholder obligations that are not secured by assets or collateral

(c) The movements in long-term insurer’s reserves for the current

year and previous year as per the table below:


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Line 27 Insurance Contracts Investment Contracts CURRENT YEAR Gross Reinsurance Net Gross Reinsurance Net Balance - Beginning of Year XXX XXX XXX XXX XXX XXX

Impact of Terminations XXX XXX XXX XXX XXX XXX Impact of New Business XXX XXX XXX XXX XXX XXX Normal Change in force XXX XXX XXX XXX XXX XXX Management Actions and Changes in Assumptions XXX XXX XXX XXX XXX XXX

Impact of Foreign Exchange rate changes XXX XXX XXX XXX XXX XXX

Balance - End of Year XXX XXX XXX XXX XXX XXX PRIOR YEAR Balance - Beginning of Year XXX XXX XXX XXX XXX XXX

Impact of Terminations XXX XXX XXX XXX XXX XXX Impact of New Business XXX XXX XXX XXX XXX XXX Normal Change in force XXX XXX XXX XXX XXX XXX Management Actions and Changes in Assumptions XXX XXX XXX XXX XXX XXX

Impact of Foreign Exchange rate changes XXX XXX XXX XXX XXX XXX

Balance - End of Year XXX XXX XXX XXX XXX XXX NOTES TO FORM 8SFS

The notes to the statutory statement of capital and surplus on a unconsolidated basis shall include the following, and any other information which in the opinion of the parent company directors is required to be disclosed if the statutory financial statements are not to be misleading -

Line 2 (g) Change in any other statutory surplus: The nature and amount of material items that have been included.

Line 4 A reconciliation between the total statutory capital and surplus and the total equity balance as per the insurer’s general purpose financial statements


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SCHEDULE III

INSTRUCTIONS AFFECTING THE STATUTORY FINANCIAL STATEMENTS (Rule 9)

(1) The statutory balance sheet, the statutory income statements and the statutory statement of capital and surplus shall be prepared on a consolidated basis in line with GAAP adopted by the insurer, as notified and agreed by the Authority (“GAAP Principles”). (2) An unconsolidated statutory balance sheet, statutory income statement, statutory statement of capital and surplus and notes to these statutory financial statements shall also be prepared. Except where specifically mentioned below, amounts in these statutory financial statements shall be assessed and valued in line with the insurer’s general purpose financial statements or where general purpose financial statements are not prepared, in line with the GAAP principles adopted by the insurer, as notified to and agreed by the Authority. (3) Every insurer shall follow the GAAP principles it has adopted in the treatment of insurance contracts that do not transfer significant insurance risk. (4) Where letters of credit, guarantees and other financial instruments are given by the insurer in favour of another person, being letters of credit or guarantees or other instruments not relating to the insurer’s own insurance and reinsurance contracts and in effect encumbering the insurer’s assets, a liability shall be recorded and the statutory capital and surplus decreased by the corresponding amount whether the insurer has pledged specific assets or not under the letters of credit guarantees or other instruments. These contingent liabilities shall be valued based on the expected present value of future cash-flows required to settle the contingent liability over the lifetime of that contingent liability, using the basic risk-free interest rate. Where the present value of contingent obligations cannot be determined, the liability should be valued at its undiscounted value. Class 3A, Class 3B and Class 4 insurers General Business Loss and Loss Expenses

(1) Every Class 3A, Class 3B and Class 4 insurer shall set aside an adequate provision to meet losses reported before, but not paid by, the last day of the relevant year, in respect of incidents occurring before that day, and to meet expenses likely to be incurred in connection with the investigation, adjustment and settlement of such losses. The said provisions shall include amounts in respect of losses reported. There shall be disclosed the adequate amount in respect of losses incurred but not reported to the insurer before the last day of the relevant year.

(2) The provision required under paragraph (1) shall not include any amount recoverable

under a contract of reinsurance in respect of the gross amount provided for. The insurer shall make allowance for any such amount as the collection of which is in its opinion is doubtful, and the amount shall be shown net of any such provisions.

(3) A Class 3A, Class 3B and Class 4 insurer’s net loss and loss expense shall not be less

than the net loss and loss expenses calculated using values in the insurer’ s audited GAAP balance sheet;

Class C, Class D and Class E insurers Long Term Insurance Reserves

Reserves for reported claims

(1) Form 1SFS Line 20 shall disclose an adequate amount set aside by a Class C, Class D or Class E insurer to meet claims unpaid at the end of the relevant year and made under contracts of insurance and reinsurance in respect of incidents occurring and reported to a Class C, Class D or Class E insurer before the end of that year.

(2) The amount set aside in accordance with paragraph (1) shall be reduced by any amount recoverable under a contract of reinsurance in respect of the gross amount provided for. The board of directors of the insurer shall make allowance for any such amount as is last-


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mentioned the collection of which is in their opinion doubtful and adjust the reserve by said amount.

Reserves for unreported claims Form 1SFS Line 21 shall disclose an adequate amount set aside by the insurer to meet claims under contracts of insurance and reinsurance in respect of incidents occurring, but not reported to the insurer, before the end of the relevant year. The said amount shall be reduced by any amount recoverable under a contract of reinsurance in respect of the gross amount provided for. The directors shall make allowance for any such amount of which is in their opinion is doubtful for collection and adjust the reserve by said amount. (1) Policy reserves—life These shall be an amount, actuarially computed, which is considered adequate to provide future guaranteed benefits as they become payable under the provisions of life insurance policies in force. Amounts applicable to other life contract benefits (such as disability waiver of premium, disability income benefits and additional accidental death benefits) and to annuities and to supplemental contracts with life contingencies may also be included. The said amount—

(a) shall not include reserves in respect of accident and health policies; and

(b) shall be reduced by the amount of reserves ceded under reinsurance contracts. The board of directors shall make allowance for any amount which in their opinion is doubtful to be collected and adjust the reserve accordingly.

(2) Policy reserves—accident & health These reserves shall be an amount actuarially computed which are considered adequate, and shall consist of—

(a) an active life reserve, that is to say, that portion of due and collected premiums which has been set aside to be recognized as earned in the future consisting of—

(i) the unearned portion of the current premium;

(ii) additional reserves that are applicable to policies which provide for the

payment of uniform rate premiums in respect of a risk the cost of which increases with the age of the insured;

(iii) reserves for rate credits;

(b) a claims reserve, that is to say, the present value of amounts not yet due on

claims; provision for future contingent benefits being included in both cases. These reserves shall not include the amount of any reserves ceded under reinsurance. The board of directors shall make allowance for any such amount which in their opinion is doubtful to be collected and adjust the reserves accordingly.

(3) Policyholders funds on deposit These funds shall consist of premiums paid in advance of the due date, whether or not interest is paid for early payment. These liabilities shall be valued at the amounts received by the insurer, plus any interest credited.

(4) Liability for future policy-holders dividends


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This shall be comprised of the amount of dividends payable, as declared by the board of directors, on participating life policies which qualify for such dividends, and shall be recorded at the amount declared.

(5) Other insurance reserves—long-term business

(a) These reserves shall consist of any other reserves required by the terms of life or accident and health contracts or as a result of special riders or options attaching to any such contracts, not being reserves provided for in Form 1SFS lines 22 to 25 inclusive of the statutory balance sheet.

(b) Such reserves must be actuarially determined and be considered adequate

by the appointed actuary.

(6) The insurer’s net long-term insurance reserves shall not be less than the net long-term insurance reserves calculated using values in the insurer’s audited GAAP balance sheet

Prepaid and deferred expenses, goodwill shall be non-admitted assets – Class 3A, Class 3B, Class 4, Class C, Class D and Class E insurers (“Insurers”) (1) Other intangible assets can be recognised and measured at a value other than zero only if they can be sold separately and the expected future economic benefits will flow to the insurer and the value of the assets can be reliably measured. These assets must be separable and there should be evidence of exchange transactions for the same or similar assets indicating that they are saleable in the market place. If the value assessment of an intangible asset cannot be reliably measured, then such asset should be valued at nil. (2) Insurers shall recognise and value deferred tax assets and liabilities in relation to all assets and liabilities in conformity with the GAAP principles adopted. Notwithstanding the above, Insurers shall value deferred taxes, other than deferred tax assets arising from the carry-forward of unused tax credits and the carry-forward of unused tax losses, on the basis of the difference between the values ascribed to assets and liabilities recognised and valued in accordance statutory financial statements prudential rules and the values ascribed to assets and liabilities as recognised and valued for tax purposes. Insurers shall only ascribe a positive value to deferred tax assets where it is probable that future taxable profit will be available against which the deferred tax asset can be utilised, taking into account any legal or regulatory requirements on the time limits relating to the carry-forward of unused tax losses or the carry-forward of unused tax credits.

(3) For the purposes of consolidated financial statements: (a) Insurers shall consolidate in the statutory financial statements holdings in affiliates where they have control. An insurer shall utilize its adopted GAAP principles to assess and determine whether it controls an affiliate. The insurer shall apply uniform GAAP valuation principles and the exceptions defined above to consolidate its affiliates. (b) Holdings in related affiliates where the insurer does not satisfy control criteria in accordance with GAAP principals but has the ability to exercise significant influence over operating and financial matters shall be valued based on the insurer’s GAAP valuation principles. GAAP valuation principles and exemptions to the valuation principles shall be applied to the affiliates before deriving the values. Holdings where the insurer has neither control nor significant influence shall be valued based on the insurer’s GAAP valuation principles.


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SCHEDULE IV

INSTRUCTIONS AFFECTING THE STATUTORY BALANCE SHEET (Rule 9)

INSTRUCTIONS AFFECTING THE STATUTORY BALANCE SHEET

Line of statutory balance sheet

Instructions

1. Cash and cash equivalents

Cash and cash equivalents (maturities of less than 90 days) as at the date of the balance sheet shall be included here. This includes restricted cash.

2. Quoted investments

There shall be disclosed severally –

(a) Bonds and debentures - (i) held to maturity: quoted fixed maturities (ii) other: quoted fixed maturities shall be included here. (b) Total bonds and debentures: The total of (a) (i) and (ii); (c) Equities –

(i) Common stock: investments in publicly quoted common shares

(ii) preferred shares: investments in publicly quoted preferred shares; and

(iii) mutual funds: investments in publicly quoted mutual funds , etc.

(d) Total equities: The total of (i), (ii) and (iii). (e) Other quoted investments: Other quoted investments

not included in 2(b) and 2(d) e.g. alternative funds.

(f) Total quoted investments: The total of 2(b), (d) and (e). 3. Unquoted investments

There shall be disclosed severally -

(a) Bonds and debentures - (i) held to maturity: unquoted fixed maturities (ii) other: unquoted fixed maturities shall be included here (b) Total bonds and debentures: The total of (i) and (ii). (c) Equities –

(i) Common stock: investments in unquoted common shares

(ii) preferred shares: investments in unquoted preferred shares; and

(iii) mutual funds: investments in unquoted mutual funds , etc.

(d) Total equities: The total of (i), (ii) and (iii). (e) Other unquoted investments: Other unquoted

investments not included in 3(b) and 3(d) e.g. alternative funds.

(f) Total unquoted investments: The total of 3(b), (d) and (e).

4. Investment in affiliates (equity)

(a) Unconsolidated Investment in affiliates shall include total investments in affiliates on an equity basis and be reflected in columns A to D of the statutory balance sheet Consolidated Investment in affiliates shall include amounts for holdings in related affiliates where the insurer does not satisfy control nor significant influence that is in accordance with the adopted GAAP principals. These amounts shall be reflected on a consolidated basis in column E and F of the statutory balance sheet.


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There shall be disclosed severally –

(i) Unregulated entities that conduct ancillary services : All unregulated entities that conduct ancillary services accounted for under equity method shall be included here;

(ii) Unregulated non-financial operating entities: All unregulated non-financial operating entities accounted for under equity method shall be included here;

(iii) Unregulated financial operating entities: All unregulated financial operating entities accounted for under equity method shall be included here;

(iv) Regulated non-insurance financial operating entities: All regulated non-insurance financial operating entities accounted for both under control and equity method shall be included here;

(v) Regulated insurance financial operating entities: All regulated insurance financial operating entities accounted for under equity method shall be included here.

(vi) Total investments in affiliates: The total of (i) to (v) inclusive.

(b) amounts receivable or payable on account of policies of insurance or reinsurance with affiliates shall not be included. Such amounts shall be included in accounts and premiums receivable (line 10) and reinsurance balances payable (line 28), respectively;

(c) funds held by ceding reinsurers which are affiliates (line 12) and funds held under reinsurance contracts with affiliates (line 34) shall not be included; and

(e) Advances to affiliates shall be carried at fair value and determined in good faith. If any amount is in the opinion of the directors uncollectible, that amount shall be deducted.

5. Investments in mortgage loans on real estate

Residential and commercial investment loans shall be included here.

There shall be disclosed severally (a) First liens. (b) Liens other than first liens. (c) Total investments in mortgage loans on real estate: The

total of (a) and (b). 6. Policy loans Loans to policyholders on the security of cash surrender value

of the policyholder’s long-term insurance policy shall be included here.

7. Real estate Commercial investments occupied by members of the insurer shall be included here.

(a) Occupied by any member of the insurer (less encumbrances): Both land and buildings and any other commercial investments occupied by members of the insurer shall be included here.

(b) Other properties (less encumbrances): Other residential and commercial investments.

(c) Total real estate: The total of (a) and (b). 8. Collateral loans Other loans shall be included here.


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9. Investment income due and accrued

Accrued investment income shall be included here.

10. Accounts and premiums receivable

Accounts and premium receivable shall include insurance premiums receivable and there shall be disclosed severally-

(a) In course of collection: Insurance balances receivable and accounts receivable.

(b) Deferred – not yet due: Premiums receivable. (c) Receivables from retrocessional contracts: Insurance

balances receivable (d) Total accounts and premiums receivable: The total of (a)

to (c) inclusive. 11. Reinsurance balances receivable

Reinsurance balances receivable shall include reinsurance balances receivable on paid losses and there shall be disclosed severally -

(a) Foreign affiliates: reinsurance balance received from foreign affiliates

(b) Domestic affiliates: reinsurance balance received from domestic affiliates

(c) Pools and associations: Reinsurance balances receivables from pools and associations

(d) All other insurers (e) Total reinsurance balances receivable: The total of (a) to

(d) inclusive. 12. Funds held by ceding

Funds held by ceding reinsurers shall be included here. Any amounts deemed uncollectible shall be deducted.

13. Sundry assets Any asset not accounted for in lines 1 to 12 and 14 may be included here if it has a readily realisable value. (excluding non-admitted assets such as prepaid expenses). Assets allowed by the Authority under Section 6C and 6D directions shall be included in other sundry assets. There shall be disclosed severally –

(a) Derivative instruments: Derivative instruments with a favourable position shall be included here

(b) Segregated accounts – Long-Term business – variable annuities

(c) Segregated accounts – Long-Term business - other (d) Segregated accounts – General business

(e) Deposit assets.

(f) Deferred acquisition costs

(g) Net receivables for investments sold

(h) Other sundry assets 1 (Specify) other assets not included in 13(a)–(g)

(i) Other sundry assets 2 (Specify) other assets not included in 13(a)–(h)

(j) Other sundry assets 3 (Specify) other assets not included in 13(a) – (i)

(k) Total sundry assets: The total of (a) to (j) inclusive. 14. Letters of credit, guarantees and other instruments

This shall be comprised of contractual rights arising from off-balance sheet arrangements to receive financial assets through:


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(a) Letters of Credit (b) Guarantees (c) Other instruments (d) Total letters of credit, guarantees and other

instruments: The total of (a) to (c).

Such asset may, with the approval of the Authority obtained on an application made for that purpose, be recorded and the capital increased by a corresponding amount. Letters of credit, guarantees or other instruments in favour of the insurer which relate to insurance or reinsurance contracts shall not be recorded.

15. Total Assets This shall be the total of lines 1 to 14 inclusive.

16. Unearned Premium Reserve

This line shall include unearned premiums and the unearned portion of the reinsurance premiums ceded. Acquisition costs shall not be deducted in calculating the amount of unearned premiums. There shall be disclosed severally -

(a) Unearned premium reserve (b) Less: ceded unearned premium reserve balances from – (i) Foreign affiliates (ii) Domestic affiliates (iii) Pools and associations (iv) All other reinsurers (c) Total ceded unearned premium reserve balance: The

total of (i) to (ii). (d) Net unearned premium reserve: The total of (a) and (c). 17. Loss and loss expense provisions


(a) Gross loss and loss expense provisions: Gross unpaid loss and loss expenses.

(b) Less: reinsurance recoverable balances (net of related provisions for uncollectible amounts): Losses and loss expenses recoverable from –

(i) Foreign affiliates (ii) Domestic affiliates (iii) Pools and associations (iv) All other reinsurers (c) Total reinsurance recoverable balance: The total of (i) to

(ii). (d) Net loss and loss expense provisions: The total of (a)

and (c). 19. Total general insurance business reserves

This shall be the total of lines 16 and 17 inclusive.

20. Reserves for reported claims

Reserves to meet unpaid claims at the end of the relevant year and made under long-term insurance policies in respect of incidents occurring and reported to the insurer before the end of year, net of any recoverable amounts.

21. Reserves for unreported claims

Reserves to meet unpaid claims at the end of the relevant year and made under long-term insurance policies in respect of incidents occurring but not reported to the insurer before the end of year, net of any recoverable amounts.

22. Policy reserves - life

Actuarially computed reserves in respect of future guaranteed benefits as they become payable under the provisions of life insurance policies in force. These may also include amounts applicable to other life contract benefits (such as disability waiver of premium, disability income benefits and additional


30

accidental death benefits). These amounts are net of any recoverable balances.

23. Policy reserves – accident and health

Actuarially computed reserves in respect of accident and heath policies. These amounts are net of any recoverable balances.

24. Policyholders’ funds on deposit

These consist of premiums paid in advance of the due date.

25. Liability for future policyholders’ dividends

Dividends payable, as declared by the directors, on participating life policies which qualify for such dividends.

26. Other long-term business insurance reserves

Reserves not included in lines 20 to 25.

27. Total long-term business insurance reserves


(a) Total gross long-term business insurance reserves: Gross unpaid loss and loss expenses.

(b) Less: Reinsurance recoverable balance on long-term business: insurance reserves recoverable

(i) Foreign affiliates (ii) Domestic affiliates (iii) Pools and associations (iv) All other reinsurers (c) Total reinsurance recoverable balance:

The total of (i) to (ii) (d) Total net long-term business insurance reserves. The

total of lines 20 and 26 inclusive, or the amount arrived at by subtracting line 27(c) from 27(a).

28. Insurance and Reinsurance balances payable

These are amounts payable to reinsurers (e.g., premiums received in advance, reinsurance premiums payable. etc.)

29. Commissions, expenses, fees and taxes payable

All unearned commissions shall be included here.

30. Loans and notes payable

Loans and notes payable shall be included here. This shall include subordinated debt.

31. Income Taxes There shall be disclosed severally:

(a) Income taxes payable (b) Deferred income taxes 32. Amounts due to affiliates

This shall be comprised of repayment terms, rates of interest and the nature of collateral given, if any.

33. Accounts payable and accrued liabilities

All accounts payable and accrued liabilities shall be included here

34. Funds held under reinsurance contracts

Funds held under reinsurance contracts shall be included here.

35. Dividends payable

All dividends payable shall be included here

36. Sundry liabilities

There shall be disclosed severally:

(a) Derivative instruments: Derivative instruments with an unfavourable position shall be included here.

(b) Segregated accounts companies


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(c) Deposit assets (d) Net payable for investments purchased

(e) Other sundry liabilities 1 (specify) other liabilities not included in 36(a) – (d)

(f) Other sundry liabilities 2 (specify) other liabilities not included in 36(a) – (e)

(g) Other sundry liabilities 3 (specify) other liabilities not included in 36(a) – (f)

(h) This shall be the total of (a) to (g) inclusive

37. Letters of credit, guarantees and other instruments

All contractual liabilities or contingent liabilities arising from off-balance sheet arrangements are reported in this line. A liability is recorded decreasing the statutory capital and surplus equal to the present value of such contingent obligations discounted to take into consideration the time value of money at an appropriate rate (to be disclosed). Where the present value of contingent obligations cannot be determined, the amount of the liability must be recorded at its undiscounted value. Letters of credit, guarantees or other instruments not in favour of a member of the insurer which relate to the insurer’s insurance or reinsurance contracts shall not be recorded. There shall be disclosed severally -

(a) Letters of credit (b) Guarantees (c) Other instruments (d) This shall be the total of (a) to (c) inclusive 38. Total other liabilities

This shall be the total of lines 28 to 37 inclusive

39. Total insurance reserves and other liabilities

This shall be the total of lines 19, 27(c) and 38 inclusive

40. Total statutory capital and surplus

This shall be comprised of the capital and surplus total as at the end of the relevant year, as shown in the group statutory statement of capital and surplus.

41. Total This shall comprise the total of lines 39 and 40


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SCHEDULE V

INSTRUCTIONS AFFECTING THE STATUTORY STATEMENT OF INCOME (Rule 9)

INSTRUCTIONS AFFECTING THE STATUTORY STATEMENT OF INCOME

Line of statutory statement of income

Instructions

1. Gross premiums written

Gross premiums written during the relevant year and disclosed severally -

(a) Direct gross premium written; (b) Assumed gross premium written; and (c) Total gross premiums written: The total of (a) and (b)

inclusive.

2. Reinsurance Premiums Ceded

Reinsurance premiums ceded during the relevant year shall be included here.

3. Net premiums written

This shall be arrived at by subtracting line 2 from line 1(c).

4. Increase (decrease) in unearned premiums

This shall be the increase (decrease) in the unearned premiums (net of prepaid reinsurance premiums or ceded unearned reinsurance premiums) from the end of the immediately preceding financial year.

5. Net premium earned

This shall comprise the aggregate of lines 3 and 4.

6. Other insurance income

This shall comprise the aggregate of all other income (such as commission and brokerage income) directly related to the underwriting general business.

7. Total General Business Underwriting Income

This shall comprise the total of lines 5 and 6.

8. Net losses incurred and net loss expenses incurred

Net losses and loss expenses incurred shall be included here.

9. Commissions and brokerage

Acquisition expenses shall be included here.

10. Total General Business Underwriting Expenses

This shall be comprised of the total of lines 8 and 9 inclusive.

11. Net underwriting profit (loss) – general business

This shall be arrived at by subtracting line 10 from line 7.

12. Gross premiums and other considerations

The amount of gross premiums and other considerations written during the relevant year shall be included here and disclosed severally -

(a) Direct gross premiums and other considerations; (b) Assumed gross premiums and other considerations; (c) Total gross premiums and other considerations: The

total of (a) and (b) inclusive. 13. Reinsurance premiums ceded

All reinsurance premiums ceded and other considerations with respect to long term business shall be included here

14. Net premiums and other considerations

Gross premiums considerations written, less amounts ceded under reinsurance contracts, during the relevant year and disclosed severally -

(a) Life; (b) Annuities; (c) Accident and health; and


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(d) Total net premiums and other considerations: The total of (a) to (c), or the amount arrived at by subtracting line 13 from line 12(c).

15. Other insurance income

This shall be comprised of the aggregate of all other income (such as commission and brokerage income) directly related to the underwriting long-term business..

16. Total Long-Term Business Income

This shall comprise total of lines 14(d) to 15 inclusive

17. Claims - life These shall be comprised of the amount of claims incurred under life insurance policies during the relevant year.

18. Policyholders' dividends

These shall be comprised of the amounts distributed or credited during the relevant year to policyholders with participating life policies.

19. Surrenders These shall be comprised of the amounts incurred during the relevant year as a result of the surrender by policyholders, either for cash or in exchange for some other consideration, of policies with cash surrender.

20. Maturities These shall be comprised of the amounts incurred as a result of the maturing during the relevant year, after a specified period of time, of any endowment policy before the death of the insured.

21. Annuities These shall be comprised of the amounts incurred during the relevant year under the terms of any annuity contract.

22. Accident and health benefits

These shall be comprised of the amounts incurred in respect of claims under accident and health contracts, being claims arising out of incidents occurring during the relevant year.

23. Commissions Commissions and brokerages paid or payable in respect of long-term business shall be included here.

24. Other These shall include any underwriting expenses related to long-term business during the relevant year that are not included in lines 17 to 23.

25. Total Long-Term Business Deductions and Expenses

This shall comprise the total of lines 17 to 24 inclusive

26. Increase (decrease) in policy reserves

This shall comprise the increase or decrease from the end of the immediately preceding financial year in policy reserves as disclosed severally -

(a) Life; (b) Annuities; (c) Accident and health; and (d) Total increase (decrease) in policy reserves: The total of

(a) to (c) inclusive. 27. Total Long-Term Business Expenses

This shall comprise the total of lines 25 and 26(d).

28. Net underwriting profit (loss) - long-term business

This shall comprise the net total of lines 16 and 27.

29. combined net underwriting results


30. Combined operating expenses

(a) General and administration;

(b) Personnel cost; (c) Other; and (d) Total combined operating expenses. This shall comprise

the total of (a), (b) and (c). 31. Combined investment income -

Income from both general and long term business assets shall be included here. Realized gains or losses shall be included on


34

net line 36 of the statutory statement of income. 32. Combined other income (deductions)

These shall comprise all income (deduction) items not assigned to any of the lines above (such as equity share in earnings of partially-owned entities). Income taxes (line 34) and realized gains (losses) (line 36) shall not be included.

33. Combined income before taxes

This shall comprised the total of lines 29 to 32 inclusive

34. Combined Income taxes (if applicable)


(a) Current: The amount provided in respect of income taxes currently payable;

(b) Deferred: The amount provided in respect of deferred income taxes; and

(c) Total: The total of (a) and (b). 35. Combined income before realized gains (losses)

This shall be calculated by subtracting line 34(c) from line 33.

36. Combined realized gains (losses)

This shall include gains or losses on the sale of investments, whether quoted or unquoted, investments in affiliates, investments in mortgage loans on real estate, and real estate. This shall also include other-than-temporary impairment charges.

37. Combined interest charges

This shall include interests and other costs incurred to settle debt payments and other obligations.

38. Net Income This shall comprise the total of lines 35, 36 and 37.


35

SCHEDULE VI

INSTRUCTIONS AFFECTING THE STATUTORY STATEMENT OF CAPITAL AND SURPLUS

(Rule 9)

INSTRUCTIONS AFFECTING THE STATUTORY STATEMENT OF CAPITAL AND SURPLUS

Instructions [Note: The numerals in bold type and letters in bold type in parentheses refer to the numbers of the line of group statutory statement of capital and surplus]

1(a) Capital Stock This shall comprise the share capital or shares of an insurer

as follows: (i) Common stock This shall comprise of common shares issued by an insurer

(ii) Preferred shares (a) Preferred shares issued by the insurer This shall comprise of preference shares issued by the insurer.

The aggregate liquidation value is also required to be disclosed.

(b) Preferred shares issued by a subsidiary This shall comprise of preference shares issued by a member

of an insurance group. The aggregate liquidation value is also required to be disclosed.

(iii) Treasury shares

This shall comprise of treasury shares issued.

(b) Contributed surplus

This shall be comprised of additional paid in capital or contributed capital in excess of par. Contribution made to additional paid in capital from shareholders shall be added to this line and distributions to common shareholders shall be deducted from this line.

(c) other fixed capital

This shall be comprised of other fixed capital approved by the Authority relating to line 14 or line 37 of the statutory balance sheet to be credited to or as the case may be, charged against capital:

(i) Hybrid capital instruments

This shall include any other fixed capital in the form of debt instruments with capital characteristics approved by the Authority.

(ii) Guarantees

This shall include any other fixed capital in the form of guarantees that are approved by the Authority.

(iii) Total any other fixed capital

This shall comprise the total of lines (c)(i) and (c)(ii).

(d) Total statutory capital


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This shall comprise the total of lines 1(a), 1(b) and 1(c). 2(a) Statutory Surplus - beginning of year This shall be equivalent to retained earnings (deficit) and

accumulated other comprehensive income (loss) at beginning of year or equal to the preceding year’s statutory surplus – end of year balance.

(b) Income for the year

This shall be comprised of the amount on line 38 of the statutory statement of income.

(c) Dividends paid and payable

This shall be comprised of all dividends declared during the relevant year, whether such dividends were or were not paid before the end of the relevant year.

(d) Change in unrealized appreciation (depreciation) of investments

This shall be comprised of any increase or decrease occurring since the end of the immediately preceding financial year in the value of quoted investments (line 2 of the statutory balance sheet), to the extent that that increase (decrease) is not reflected in the statutory statement of income.

(e) Change in non-admitted assets

This shall be comprise of any increase or decrease occurring since the end of the immediately preceding financial year in the value of non-admitted assets.

(f) Change in appraisal of real estate

This shall be comprised of any increase (or decrease) occurring since the end of the immediately preceding financial year in the value of real estate carried at appraisal value relating to line 7 of the statutory balance sheet.

(g) Change in any other statutory surplus

This shall be comprised of any change in retained earnings not included from lines 2(b) to (f). This line may also include change in accumulated other comprehensive income (loss) during the relevant year. This may also include any effect of adoption of an accounting standard.

(h) Statutory surplus - end of year

This shall comprise the aggregate of lines 2(a) to 2(g).

3. Minority interest

This shall comprise the portion of investments in partially-owned entities not owned by the parent of the insurer or owned by minority shareholders of an insurer. Such interest is also referred to as “a non-controlling interest”.

4. Total statutory capital and surplus

This shall be comprised of the total of lines 1(d), 2(h) and 3.


37

SCHEDULE VII

(Rule. 10(1)) MINIMUM MARGIN OF SOLVENCY FOR GENERAL BUSINESS

Figure A 1. For the purposes of Rule 10, figure A has the following value in relation to the class of insurer indicated—

Class 3A $1,000,000 Class 3B $1,000,000 Class 4 $100,000,000

Figure B 2. (1) For the purpose of Rule 10, sub-paragraphs (1) and (2) set out the method of calculating figure B in relation to Class 3A, and Class 3B insurers, and sub-paragraph (4) in relation to Class 4 insurers. (2) Where the net premiums as reported in Schedule I, Form 2SFS Column A, Line 3 —

(a) written by a Class 3A or Class 3B insurer in its current financial year, or

(b) projected to be written by an insurer, on application for registration as a Class 3A or Class 3B insurer, in its first financial year,

do not, or (as the case may be) are not projected to, exceed $6,000,000, figure B shall be calculated as 20% of those net premiums. (3) Where the net premiums reported in Schedule I, Form 2SFS Column A, Line 3 —

(a) written by a Class 3A or Class 3B insurer in its current financial year, or

(b) projected to be written by an insurer, on application for registration as a Class 3A or Class 3B insurer

do, or (as the case may be) are projected to, exceed $6,000,000, figure B shall be calculated as $1,200,000 plus the following percentage of the net premiums written which exceed $6,000,000 in relation to the class of insurer indicated-

Class 3A 15% Class 3B 15%

(4) Figure B shall be calculated as 50% of the net premiums written reported in Schedule I, Form 2SFS Column A, Line 3 by a Class 4 insurer in its current financial year, or projected to be written by an insurer on application for registration as a Class 4 insurer. (5) In this paragraph, “net premiums written” in relation to any financial year means—

(a) in relation to a Class 3A or Class 3B insurer, the net amount, after deductions of any premiums ceded by the insurer for reinsurance, of the premiums written by the insurer in that year in respect of general business; and

(b) in relation to a Class 4 insurer, the net amount, after deductions of any

premiums ceded by the insurer for reinsurance (not exceeding 25% of gross premiums written), of the premiums written by the insurer in that year in respect of general business,

and “net premiums projected to be written” has a corresponding meaning.


38

Figure C 3. For the purposes of Rule 10, figure C shall be calculated as the following percentage of the aggregate—

(a) of the amounts reported by the insurer in completing lines 17(d) and 18 of Schedule I, Form 1SFS Column A in these Rules, or

(b) of those amounts as projected by the insurer on application for registration,

in relation to the class of insurer indicated-

Class 3A 15% Class 3B 15% Class 4 15%

Figure D 4. For the purposes of Rule 10(1), figure D shall be calculated by a Class 3A, Class 3B or Class 4 insurer as 25% of that insurer’s ECR reported at the end of its relevant year.


39

SCHEDULE VIII

(Rule 12(1)) MINIMUM MARGIN OF SOLVENCY FOR LONG-TERM BUSINESS

Class Minimum Margin of Solvency (‘MMS’) C greater of $500,000 or 1.5% of assets; D greater of $4,000,000 or 2% of first $250,000,000 of assets plus 1.5% of assets

above $250,000,000; E greater of $8,000,000 or 2% of first $500,000,000 of assets plus 1.5% of assets

above $500,000,000; where assets shall be the total assets reported on an insurer’s balance sheet on Schedule I Form 1SFS Column C, Line 15 in the relevant year less the aggregate of the amounts held in a segregated account reported on Schedule I, Form 1SFS Column C, Lines 13(b) and (c). Class Minimum Margin of Solvency (‘MMS’) – ECR Floor requirement C 25% of ECR D 25% of ECR E 25% of ECR


40

SCHEDULE IX

CONTENT OF CONDENSED GENERAL PURPOSE FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEET



ASSETS

Line No

20XX 20XX-1

1. CASH AND CASH EQUIVALENTS XXX XXX

2. QUOTED INVESTMENTS:


(i) Held to maturity XXX XXX

(ii) Other XXX XXX

(b) Total Bonds and Debentures XXX XXX

(c) Equities

(i) Common stocks XXX XXX

(ii) Preferred stocks XXX XXX

(iii) Mutual funds XXX XXX

(d) Total equities XXX XXX

(e) Other quoted investments XXX XXX

(f) Total quoted investments XXX XXX

3. UNQUOTED INVESTMENTS:


(i) Held to maturity XXX XXX

(ii) Other XXX XXX

(b) Total Bonds and Debentures XXX XXX

(c) Equities

(i) Common stocks XXX XXX

(ii) Preferred stocks XXX XXX

(iii) Mutual Funds XXX XXX

(d) Total equities XXX XXX

(e) Other unquoted investments XXX XXX

(f) Total unquoted investments XXX XXX

4. INVESTMENTS IN AND ADVANCES TO AFFILIATES

(a) Unregulated entities that conduct ancillary services XXX XXX

(b) Unregulated non-financial operating entities XXX XXX


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(c) Unregulated financial operating entities XXX XXX

(d) Regulated non-insurance financial operating entities XXX XXX

(e) Regulated insurance financial operating entities XXX XXX

(f) Total investments in affiliates XXX XXX

(g) Advances to affiliates XXX XXX

(h) Total investments in and advances to affiliates XXX XXX

5. INVESTMENTS IN MORTGAGE LOANS ON REAL ESTATE:

(a) First liens XXX XXX

(b) Other than first liens XXX XXX

(c) Total investment in mortgage loans on real estate XXX XXX

6. POLICY LOANS XXX XXX

7. REAL ESTATE:

(a) Occupied by the company (less encumbrances) XXX XXX

(b) Other properties (less encumbrances) XXX XXX

(c) Total real estate XXX XXX

8. COLLATERAL LOANS XXX XXX

9. INVESTMENT INCOME DUE AND ACCRUED XXX XXX

10. ACCOUNTS AND PREMIUMS RECEIVABLE

(a) In course of collection XXX XXX

(b) Deferred – not yet due XXX XXX (c) Receivables from retrocessional contracts XXX XXX (d) Total accounts and premiums receivable XXX XXX 11. REINSURANCE BALANCES RECEIVABLE

(a) Foreign affiliates XXX XXX

(b) Domestic affiliates XXX XXX

(c) Pools & associations XXX XXX

(d) All other insurers XXX XXX

(e) Total reinsurance balance receivable XXX XXX 12. FUNDS HELD BY CEDING REINSURERS XXX XXX

13. SUNDRY ASSETS:

(a) Derivative instruments XXX XXX

(b) Segregated accounts – Long-Term business – variable annuities XXX XXX

(c) Segregated accounts - Long-Term business - other XXX XXX

(d) Segregated accounts - General business XXX XXX

(e) Deposit assets XXX XXX

(f) Deferred acquisition costs XXX XXX

(g) Net receivables for investments sold XXX XXX

(h) Other sundry assets 1 (specify) XXX XXX


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(i) Other sundry assets 2 (specify) XXX XXX

(j) Other sundry assets 3 (specify) XXX XXX

(k) Total sundry assets XXX XXX


(a) Letters of credit XXX XXX

(b) Guarantees XXX XXX

(c) Other instruments XXX XXX

(d) Total letters of credit, guarantees and other instruments XXX XXX

15. TOTAL XXX XXX

TOTAL INSURANCE RESERVES, OTHER LIABILITIES AND CAPITAL AND SURPLUS

16. UNEARNED PREMIUM RESERVE

(a) Gross unearned premium reserves XXX XXX

(b) Less: ceded unearned premium reserve

(i) Foreign affiliates XXX XXX

(ii) Domestic affiliates XXX XXX

(iii) Pools & associations XXX XXX

(iv) All other reinsurers XXX XXX

(c) Total ceded unearned premium reserve XXX XXX

(d) Net unearned premium reserve XXX XXX

17. LOSS AND LOSS EXPENSE PROVISIONS

(a) Gross loss and loss expense provisions XXX XXX

(b) Less: Reinsurance recoverable balance




(iv) All other reinsurers XXX XXX

(c) Total reinsurance recoverable balance XXX XXX

(d) Net loss and loss expenses provisions XXX XXX

18. OTHER GENERAL BUSINESS INSURANCE RESERVES XXX XXX

19. TOTAL GENERAL BUSINESS INSURANCE RESERVES XXX XXX

LONG-TERM BUSINESS INSURANCE RESERVES

20. RESERVE FOR REPORTED CLAIMS XXX XXX

21. RESERVE FOR UNREPORTED CLAIMS XXX XXX


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22. POLICY RESERVES - LIFE XXX XXX

23. POLICY RESERVES – ACCIDENT AND HEALTH XXX XXX

24. POLICYHOLDERS’ FUNDS ON DEPOSIT XXX XXX

25. LIABILITY FOR FUTURE POLICYHOLDERS’ DIVIDENDS XXX XXX

26. OTHER LONG-TERM BUSINESS INSURANCE RESERVES XXX XXX

27. TOTAL LONG-TERM BUSINESS INSURANCE RESERVES

(a) Total gross long-term business insurance reserves XXX XXX

(b) Less: Reinsurance recoverable balance on long-term business




(iv) All other insurers XXX XXX

(c) Total reinsurance recoverable balance XXX XXX (d) Total net long-term business insurance reserves XXX XXX

OTHER LIABILITIES

28. INSURANCE AND REINSURANCE BALANCES PAYABLE XXX XXX

29. COMMISSIONS, EXPENSES, FEES AND TAXES PAYABLE XXX XXX

30. LOANS AND NOTES PAYABLE XXX XXX

31. (a) INCOME TAXES PAYABLE XXX XXX

(b) DEFERRED INCOME TAXES XXX XXX

32. AMOUNTS DUE TO AFFILIATES XXX XXX

33. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES XXX XXX

34. FUNDS HELD UNDER REINSURANCE CONTRACTS XXX XXX

35. DIVIDENDS PAYABLE XXX XXX

36. SUNDRY LIABILITIES:

(a) Derivative instruments XXX XXX

(b) Segregated accounts companies XXX XXX

(c) Deposit liabilities XXX XXX

(d) Net payable for investments purchased XXX XXX

(e) Other sundry liabilities 1 (specify) XXX XXX

(f) Other sundry liabilities 2 (specify) XXX XXX

(g) Other sundry liabilities 3 (specify) XXX XXX

(h) Total sundry liabilities XXX XXX


(a) Letters of credit XXX XXX


44

(b) Guarantees XXX XXX

(c) Other instruments XXX XXX

(d) Total letters of credit, guarantees and other instruments XXX XXX

38. TOTAL OTHER LIABILITIES XXX XXX

39. TOTAL INSURANCE RESERVES AND OTHER LIABILITIES XXX XXX

CAPITAL AND SURPLUS

40. TOTAL CAPITAL AND SURPLUS XXX XXX

41. TOTAL XXX XXX


45

CONDENSED CONSOLIDATED STATEMENT OF INCOME



Line No

20XX 20XX-1

GENERAL BUSINESS UNDERWRITING INCOME

1. GROSS PREMIUMS WRITTEN

(a) Direct gross premiums written XXX XXX

(b) Assumed gross premiums written XXX XXX

(c) Total gross premiums written XXX XXX

2. REINSURANCE PREMIUMS CEDED XXX XXX

3. NET PREMIUMS WRITTEN XXX XXX

4. INCREASE (DECREASE) IN UNEARNED PREMIUMS XXX XXX 5. NET PREMIUMS EARNED XXX XXX 6. OTHER INSURANCE INCOME XXX XXX 7. TOTAL GENERAL BUSINESS UNDERWRITING INCOME XXX XXX GENERAL BUSINESS UNDERWRITING EXPENSES

8. NET LOSS INCURRED AND NET LOSS EXPENSES

INCURRED XXX XXX

9. COMMISSIONS AND BROKERAGE XXX XXX 10. TOTAL GENERAL BUSINESS UNDERWRITING

EXPENSES XXX XXX

11. NET UNDERWRITING PROFIT (LOSS) – GENERAL BUSINESS XXX XXX

LONG-TERM BUSINESS INCOME 12. GROSS PREMIUMS AND OTHER CONSIDERATIONS: (a) Direct gross premiums and other considerations XXX XXX (b) Assumed gross premiums and other considerations XXX XXX (c) Total gross premiums and other considerations XXX XXX 13. PREMIUMS CEDED XXX XXX 14. NET PREMIUMS AND OTHER CONSIDERATIONS: (a) Life XXX XXX (b) Annuities XXX XXX (c) Accident and Health XXX XXX (d) Total net premiums and other considerations XXX XXX 15. OTHER INSURANCE INCOME XXX XXX 16. TOTAL LONG-TERM BUSINESS INCOME XXX XXX LONG-TERM BUSINESS DEDUCTIONS AND EXPENSES


46

17. CLAIMS - LIFE XXX XXX 18. POLICYHOLDERS’ DIVIDENDS XXX XXX 19. SURRENDERS XXX XXX 20. MATURITIES XXX XXX 21. ANNUITIES XXX XXX 22. ACCIDENT AND HEALTH BENEFITS XXX XXX 23. COMMISSIONS XXX XXX 24. OTHER XXX XXX 25. TOTAL LONG-TERM BUSINESS DEDUCTIONS AND

EXPENSES XXX XXX

26. INCREASE (DECREASE) IN POLICY RESERVES (ACTUARIAL LIABILITIES):

(a) Life XXX XXX (b) Annuities XXX XXX (c) Accident and Health XXX XXX (d) Total increase (decrease) in policy reserves XXX XXX 27. TOTAL LONG-TERM BUSINESS EXPENSES XXX XXX 28. NET UNDERWRITING PROFIT (LOSS) – LONG-TERM

BUSINESS XXX XXX

29. COMBINED NET UNDERWRITING RESULTS BEFORE THE UNDERNOTED ITEMS XXX XXX

UNDERNOTED ITEMS 30. COMBINED OPERATING EXPENSE (a) General and administration XXX XXX (b) Personnel cost XXX XXX (c) Other XXX XXX (d) Total combined operating expenses XXX XXX 31. COMBINED INVESTMENT INCOME - NET XXX XXX 32. COMBINED OTHER INCOME (DEDUCTIONS) XXX XXX 33. COMBINED INCOME BEFORE TAXES XXX XXX 34. COMBINED INCOME TAXES (IF APPLICABLE): (a) Current XXX XXX (b) Deferred XXX XXX (c) Total XXX XXX 35. COMBINED INCOME BEFORE REALIZED GAINS

(LOSSES) XXX XXX

36. COMBINED REALIZED GAINS (LOSSES) XXX XXX 37. COMBINED INTEREST CHARGES XXX XXX 38. NET INCOME XXX XXX


47

CONDENSED CONSOLIDATED STATEMENT OF CAPITAL AND SURPLUS

[blank] name of Company

as at [blank] (day/month/year) expressed in [blank] (currency used (Rule 14))

Line No

20XX 20XX-1

1. CAPITAL:

(a) Capital stock

(i) Common shares: Authorized shares of par value each issued and fully paid shares

XXX XXX

(ii) (A) Preferred shares: Authorized shares of par value each issued and fully paid shares

XXX XXX

(B) Preferred shares issued by a subsidiary: Authorized shares of par value each issued and fully paid shares

XXX XXX

(iii) Treasury shares: Repurchased shares of par value each issued XXX XXX

(b) Contributed surplus XXX XXX (c) Any other fixed capital (i) Hybrid capital instruments XXX XXX (ii) Guarantees and others XXX XXX (iii) Total any other fixed capital XXX XXX (d) Total Capital XXX XXX 2. SURPLUS:

(a) Surplus — Beginning of Year XXX XXX (b) Add: Income for the year XXX XXX (c) Less: Dividends paid and payable XXX XXX (d) Add (Deduct) change in unrealized appreciation

(depreciation) of investments XXX XXX

(e) Add (Deduct) change in any other surplus XXX XXX (f) Surplus — End of Year XXX XXX 3. MINORITY INTEREST XXX XXX 4. TOTAL CAPITAL AND SURPLUS XXX XXX


48

SCHEDULE X

NOTES TO CONDENSED CONSOLIDATED GENERAL PURPOSE FINANCIAL STATEMENTS

Matters to be set forth in a General Note to the Financial Statements 1 The name of the shareholder controllers of the insurer

Name and place of incorporation of the insurer’s affiliates that are consolidated in these financial statements.

Changes to the shareholder controller(s); or to the place of the incorporation of an insurer’s affiliates during the relevant year, in this regard, provide the date and details of such change.

2. The general nature of the risks underwritten by the insurer.

3. The accounting standards and principles on which the condensed financial statements are based (i.e. IFRS, US GAAP, etc.)

4.

The accounting policies of the insurer, any significant change made during the relevant year to such policies and the effect, if any, of changes to the information contained in the financial statements.

5. The basis of recognition of premium, investment and commission income.

6. The method used to translate amounts denominated in currencies other than the currency of the financial statements, the amounts, if material, gained or lost on such translation and the manner in which those gains or losses are treated in those statements.

7. Any foreign exchange control restrictions affecting assets of the insurer, with particular reference to money balances which cannot be transferred to the insurer due to reasons unrelated to the insurance business conducted by the insurer

8. The nature and amount of any m a t e r i a l contingencies or commitments (for example, a commitment involving an obligation requiring abnormal expenditure, pending lawsuit, or the conclusion of a long lease).

9. Any default made by the insurer in relation to the principal, interest, sinking fund or redemption provisions of any securities issue made, or any credit agreement entered into, by it.

10. The gross amount of arrears of dividends on preferred cumulative shares, and the date to which those dividends were last paid.

11. The amount of any loan made during the relevant year by the insurer, to any director or officer of the insurer, not being a loan made in the ordinary course of business.

12. The amount of any obligation in respect of retirement benefits relating to employees of the insurer arising from service prior to the end of the relevant year remaining to be charged against operations, and the basis on which the insurer proposes to charge that amount.

13. Fair value amounts for all quoted and unquoted investment lines. Fair value hierarchy of investments based on the following levels: • Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities that the reporting entity can access at the measurement date • Level 2: Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly • Level 3: Unobservable inputs

14. The contractual maturity profile of the insurers’ fixed maturity and short-term investments: • Due within one year • Due after one year through five years


49

• Due after five years through ten years • Due after ten years

15. Related party transactions detailing the nature of the relationship, description of transactions including transactions where no amounts or nominal amounts were ascribed, monetary amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period, and amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

16. Any transaction made or other event occurring between the end of the relevant year and the date of approval of the financial statements by the board of directors and materially affecting the financial statements, not being a transaction made or an event occurring in the ordinary course of business.

17. Any other information which in the opinion of the board of directors is required to be disclosed if the financial statements are not to be misleading.

Matters to be set forth in Notes to the Consolidated Statement of Capital and Surplus

Line Information required to be given [Note: The numerals in bold type and letters in bold type in parentheses refer to the numbers of the line of the statement of capital and surplus]

1(a) Capital Stock

As respects authorized share capital there shall be disclosed severally—

(a)

the number of common shares and preferred shares of each class, the par value, if any, of each class and a brief description of each class;

(b) the dividend rates applicable to any preference shares, and whether the dividends are cumulative, including the liquidation values of the preference shares;

(c) the redemption price of any redeemable shares;

(d) any conversion provisions.

As respects issued share capital there shall be disclosed severally—

(a) the number of shares in, and the share capital amounts for, each class of common and preferred shares;

(b) the amounts called and unpaid or otherwise due in respect of those shares;

(c) the amounts not called on those shares that will become receivable in due course when called

As respects issued share capital there shall be disclosed severally—

(a) the number of shares repurchased, and the share capital amounts for, each class of common and preferred shares;

1(b) Contributed surplus

The nature of any change in contributed surplus during the relevant year.


50

2(c) Dividends paid and payable

The amount and nature of any dividend paid during the relevant year that was other than a cash dividend. There shall also be disclosed in notes the following information—

(a) details of any change in the authorized share capital of the insurer during the relevant year;

(b) where an insurer has contracted to issue or re-issue shares or has given options to purchase shares, the class and number of shares affected, the price and date of the issue or re-issue of the shares or the exercise of the options and (shown separately) the total number of shares in respect of which options are held by directors and officers of the insurer;

(c) details of any share transactions during the relevant year including— (i) the number of shares of each class issued since the date of the last balance

sheet, giving the value attributed thereto and distinguishing—

(aa) shares i s s u e d f o r c a s h (showing s e p a r a t e l y shares issued pursuant to options or warrants);

(bb) shares issued directly or indirectly for services; and

(cc) shares issued directly or indirectly for other considerations;

(ii) the number of shares of each class redeemed since the date of the last balance sheet and the consideration given and, where the consideration was other than cash, the nature of the consideration given and the value attributed thereto.

Matters to be set forth in Notes to the Consolidated Balance Sheet – Class 3A, Class C, and Class D

Line Line of balance sheet Information required to be given 1. Cash and cash equivalents Any encumbrance on cash or cash equivalents must be

disclosed. Examples of such encumbrances are: irrevocable letters of credit; amounts held for security or as collateral against a liability of the insurer or an affiliate; any other use restriction such that the funds in question are held in escrow or in a custodial account.

2. Quoted investments The method of valuation of quoted investment must be described. Any encumbrance on quoted investments must be disclosed. Examples of such encumbrances are: irrevocable letters of credit; amounts held for security or as collateral against a liability of the insurer or an affiliate.

3. Unquoted investments The method of valuation of any unquoted investment must be described. Any encumbrance on unquoted investments must be disclosed. Examples of such encumbrances are: irrevocable letters of credit; amounts held for security or as collateral against a liability of the insurer or an affiliate.

4. Investment in and advances to affiliates The method of valuation must be described. Repayment terms and the rates of interest applicable to advances must also be given.


51

5. Investments in mortgage loans on real estate The range of interest rates and the range of maturity dates for mortgage loans on real estate must be disclosed.

6. Policy loans Loans to policyholders on the security of cash surrender value of the policyholder’s long-term insurance policy shall be included here.

7. Real estate As regards real estate - (a) (i) the method of valuation; and (ii) where there are

encumbrances, the value of the real estate before encumbrances, the amount and nature of the encumbrances and the repaying terms and interest rates applicable to the encumbrances, shall be disclosed.

(b) To the extent permitted by the accounting standards and principles on which the condensed financial statements are based, where an independent appraisal has been made, real estate may be valued at the appraisal value net of the amount of any encumbrances. In such a case, full details of the appraisal (including the date of the appraisal, the name of the appraiser, the basis of valuation and the disposition of any amounts added to or deducted from the book value) shall be disclosed.

(c) where other properties (i.e., properties not occupied by the insurer) are included in the balance sheet, the nature of the investments represented by those properties (for example whether held for investment return, or as a result of default of mortgage, or for speculative gain) shall be disclosed.

8. Collateral loans Description and amount of the collateral loans.

9. Investment income due and accrued Accrued investment income shall be included here. 10. Accounts and premiums receivable Accounts and premium receivable shall include insurance and

reinsurance premiums receivable and the following must be disclosed in a note:

(a) Details of collateralized balances.

(b) The amount of the receivable balance with affiliates.

11. Reinsurance balances receivable Reinsurance balances receivable shall include reinsurance balances receivable on paid losses. Details of collateralized balances shall be disclosed.

12. Funds held by ceding reinsurers The amount held by affiliates shall be disclosed.

13. Sundry assets (a) The nature and terms of these assets.

(b) For derivatives and embedded derivatives, if any the following must be disclosed—



14. Letters of credit, guarantees and other Any other assets not disclosed in lines 1 through 13 should be


52

instruments disclosed here. The nature and the method of valuation should be disclosed.

16. Unearned premium reserve The method of calculating unearned premiums and the unearned portion of the reinsurance premiums ceded. Acquisitions costs shall not be deducted in calculating the amount of unearned premium

17. Loss and loss expense provisions The following must be disclosed in a note -

(a) Movements in the loss and loss expense provisions for the current year and previous year as per the table below.

(b) Reasons for the change in the net losses incurred and net loss expenses incurred related to prior years and indicate whether additional premiums or return premiums have been accrued as a result of the prior year effects.

(c) For the loss and loss expense provisions the following must be disclosed, if any—

(i) total restricted assets - an amount equal to the value of all that are held for security or collateral against a liability or contingent liability; and

(ii) unsecured policyholder obligations - an amount equal to all policyholder obligations that are not secured by assets or collateral.

20. Reserves for reported claims The method of determining reserves for reported claims.

21. Reserves for unreported claims The method of determining reserves for unreported claims.

22. Policy reserves – life The method of calculation, and the range of significant or material interest rates and mortality factors used in calculations.

23. Policy reserves accident and health The method of calculation of the reserves.

24. Policyholders’ funds on deposit The method of determining policyholders’ funds on deposit.

25. Liability for future policyholders’ dividends The following must be disclosed in a note –

(a) The relative percentage of participating insurance;

(b) The method of accounting for policyholder dividends;

(c) The amount of dividends; and

(d) The amount of any additional income allocated to participating policyholders

26. Other insurance reserves - long term The method of calculation of the reserves

27. Total long-term business insurance reserves For the long-term business insurance reserves the following must be disclosed, if any—


53

(a) Total restricted assets - an amount equal to the value of all assets that are held for security or collateral against a liability or contingent liability; and

(b) Unsecured policyholder obligations - an amount equal to all policyholder obligations that are not secured by assets or collateral

28. Insurance and reinsurance balances payable The payable balance to affiliates shall be disclosed.


All unearned commissions shall be disclosed.

30. Loans and notes payable This shall be comprised of repayment terms, rates of interest and the nature of collateral given, if any.

31. (a) Income taxes payable

(b) Deferred income taxes Details o f t h e deferred income tax provision

32. Amounts due to affiliates This shall be comprised of repayment terms, rates of interest and the nature of collateral given, if any.

33. Accounts payable and accrued liabilities All accounts payable and accrued liabilities shall be disclosed.

34. Funds held under reinsurance contracts The amount held by affiliates shall be disclosed.

35. Dividends payable All dividends payable shall be disclosed.

36. Sundry liabilities (a) The nature of these liabilities and the repayment terms;

(b) For derivatives and embedded derivatives, if any, the following must be disclosed—




(a) The nature and valuation method for the letters or credit, guarantees, and other instruments. These should only be included to the extent that they would be recognized under the insurer’s GAAP accounting standards.

(b) the name of the entity granting the letter of credit, guarantee or other instrument, and the name of the entity in whose favour the letter of credit, guarantee or other instrument was granted;

(c) the amount of the letter of credit, guarantee or other instrument;


54

(d) the purpose for which the letter of credit, guarantee or other instrument was granted

Matters to be set forth in Notes to the Consolidated Statement of Income – Class 3A, Class C, and Class D

Line of statement of income Information required to be given 6. Other insurance income The nature of material items that have been included.

15. Other insurance income The nature of material items that have been included.

32. Combined other income (deductions) The nature of material items that have been included.

36. Combined realized gains (loss) The nature of material items that have been included.


55

SCHEDULE XI Instructions affecting the Condensed General Purpose Financial Statements

INSTRUCTIONS AFFECTING THE CONDENSED CONSOLIDATED BALANCE SHEET Line of consolidated balance sheet

Instructions

1. Cash and cash equivalents Cash and cash equivalents (maturities of less than 90 days) as at balance sheet shall be included here. This includes restricted cash.

2. Quoted investments There shall be disclosed severally -

(a) Bonds and debentures – where the bonds and debentures are in level 3 of the investments fair value hierarchy, they should be categorized as unquoted.

(i) held to maturity: quoted fixed maturities (ii) other: quoted fixed maturities shall be included here. (b) Total bonds and debentures: The total of (a) (i) and (ii); (c) Equities –

(i) Common stock: investments in publicly quoted common shares (ii) preferred shares: investments in publicly quoted preferred shares; and (iii) mutual funds: investments in publicly quoted mutual funds , etc. (d) Total equities: The total of (c) (i), (ii) and (iii). (e) Other quoted investments: Other quoted investments not included in

2(b) and 2(d) (e.g. alternative funds which are publically traded).

(f) Total quoted investments: The total of 2(b), (d) and (e). 3. Unquoted investments There shall be disclosed severally -

(a) Bonds and debentures - (i) held to maturity: unquoted fixed maturities (ii) other: unquoted fixed maturities shall be included here (b) Total bonds and debentures: The total of (i) and (ii). (c) Equities –

(i) Common stock: investments in unquoted common shares (ii) preferred shares: investments in unquoted preferred shares; and (iii) mutual funds: investments in unquoted mutual funds , etc. (d) Total equities: The total of (c) (i), (ii) and (iii). (e) Other unquoted investments: Other unquoted investments not

included in 3(b) and 3(d) e.g. alternative funds.

(f) Total unquoted investments: The total of 3(b), (d) and (e). 4. Investment in affiliates (equity)

All investments recognised as “significant influence” and accounted under the equity accounting method shall be included here There shall be disclosed severally -

(a) Unregulated entities that conduct ancillary services: All unregulated entities that conduct ancillary services accounted for under equity method shall be included here.

(b) Unregulated non-financial operating entities: All unregulated non-financial operating entities accounted for under equity method shall be included here.

(c) Unregulated financial operating entities: All unregulated financial operating entities accounted for under equity method shall be included here.

(d) Regulated non-insurance financial operating entities: All regulated non-insurance financial operating entities accounted for both under control and equity method shall be included here.

(e) Regulated insurance financial operating entities: All regulated


56

insurance financial operating entities accounted for under equity method shall be included here.

(f) Total investments in affiliates: The total of (a) to (e) inclusive. 5. Investments in mortgage loans on real estate

Residential and commercial investment loans shall be included here.

There shall be disclosed severally (a) First liens. (b) Liens other than first liens. (c) Total investments in mortgage loans on real estate: The total of (a) and

(b). 6. Policy loans Loans to policyholders on the security of cash surrender value of the

policyholder’s long-term insurance policy shall be included here.

7. Real estate Commercial investments occupied by the company shall be included here.

(a) Occupied by the company (less encumbrances): Both land and buildings and any other commercial investments occupied by the company shall be included here.

(b) Other properties (less encumbrances): Other residential and commercial investments.

(c) Total real estate: The total of (a) and (b). 8. Collateral loans Other loans shall be included here.

9. Investment income due and accrued

Accrued investment income shall be included here.

10. Accounts and premiums receivable

This line shall include insurance and reinsurance premiums receivable.


(a) In course of collection: Insurance balances receivable and accounts receivable.

(b) Deferred – not yet due: Premiums receivable. (c) Receivables from retrocessional contracts: Insurance balances

receivable (d) Total accounts and premiums receivable: The total of (a) to (c)

inclusive. 11. Reinsurance balances receivable

This line shall include reinsurance balances receivable on paid losses.


(a) Foreign affiliates: reinsurance balance receivable from foreign affiliates (b) Domestic affiliates: reinsurance balance receivable from domestic

affiliates (c) Pools and associations: Reinsurance balances receivables from pools

and associations (d) All other insurers (e) Total reinsurance balances receivable: The total of (a) to (d) inclusive. 12. Funds held by ceding Funds held by ceding reinsurers shall be included here. Any amounts

deemed uncollectible shall be deducted.

13. Sundry assets There shall be disclosed severally –

(a) Derivative instruments: Derivative instruments with a favourable position shall be included here

(b) Segregated accounts – Long-Term business – variable annuities (c) Segregated accounts – Long-Term business - other (d) Segregated accounts – General business

(e) Deposit assets.

(f) Deferred acquisition costs (g) Net receivables for investments sold (h) Other sundry assets 1 (Specify) other assets not included in lines 1


57

3(a)-(g) (i) Other sundry assets 2 (Specify) other assets not included in 13(a)-(h) (j) Other sundry assets 3 (Specify) other assets not included in 13(a)-(i) (k) Total sundry assets: The total of (a) to (j) inclusive. 14. Letters of credit, guarantees and other instruments

This shall be comprised of contractual rights arising from off-balance sheet arrangements to receive financial assets through Letters of Credit, Guarantees, and Other Instruments.

15. Total Assets This shall comprise the total of lines 1 to 14 inclusive.

16. Unearned premium reserve This line shall include unearned premiums and the unearned portion of the reinsurance premiums ceded.

(a) Gross unearned premium reserves (b) Less: ceded unearned premium reserve from – (i) Foreign affiliates (ii) Domestic affiliates (iii) Pools and associations (iv) All other reinsurers (c) Total ceded unearned premium reserve balance: The total of (a) (i) to

(ii).[?] (d) Net unearned premium reserve: The total of (a) and (c). 17. Loss and loss expense provisions


(a) Gross loss and loss expense provisions: Gross unpaid loss and loss expenses.

(b) Less: reinsurance recoverable balances (net of related provisions for uncollectible amounts): Losses and loss expenses recoverable from –

(i) Foreign affiliates (ii) Domestic affiliates (iii) Pools and associations (iv) All other reinsurers (c) Total reinsurance recoverable balance: The total of (b) (i) to (ii). (d) Net loss and loss expense provisions: The total of (a) and (c). 19. Total general insurance business reserves

This shall comprise the total of lines 16 and 17 inclusive.

20. Reserves for reported claims Reserves to meet unpaid claims at the end of the relevant year and made under long-term insurance policies in respect of incidents occurring and reported to the insurer before the end of year, net of any recoverable amounts.

21. Reserves for unreported claims

Reserves to meet unpaid claims at the end of the relevant year and made under long-term insurance policies in respect of incidents occurring but not reported to the insurer before the end of year, net of any recoverable amounts.

22. Policy reserves - life Reserves i n respect of future guaranteed benefits as they become payable under the provisions of life insurance policies in force. These may also include amounts applicable to other l i f e contract benefits (such as disability waiver of premium, disability income benefits and additional accidental death benefits). These amounts are net of any recoverable balances.

23. Policy reserves – accident and health

Reserves in respect of accident and health policies. These amounts are net of any recoverable balances.

24. Policyholders’ funds on deposit

These consist of premiums paid in advance of the due date.

25. Liability for future policyholders’ dividends

Dividends payable, as declared by the directors, on participating life policies which qualify for such dividends.

26. Other long-term business insurance reserves

Reserves not included in lines 20 to 25.

27. Total long-term business insurance reserves



58

(a) Total gross long-term business insurance reserves: Gross unpaid loss and loss expenses.

(b) Less: Reinsurance recoverable balance on long-term business: insurance reserves recoverable

(i) Foreign affiliates (ii) Domestic affiliates (iii) Pools and associations (iv) All other reinsurers (c) Total reinsurance recoverable balance:

The total of (b) (i) to (ii) (d) Total net long-term business insurance reserves. The total of lines 20

and 26 inclusive, or the amount arrived at by subtracting line 27(c) from line 27(a).

28. Insurance and Reinsurance balances payable

These are amounts payable to reinsurers (e.g., premiums received in advance, reinsurance premiums payable. etc.)


All unearned commissions shall be included here.

30. Loans and notes payable Loans and notes payable shall be included here. This shall include subordinated debt.

31. Income Taxes There shall be disclosed severally:

(a) Income taxes payable (b) Deferred income taxes 32. Amounts due to affiliates This shall be comprised of repayment terms, rates of interest and that nature

of collateral given, if any. 33. Accounts payable and accrued liabilities

All accounts payable and accrued liabilities shall be included here

34. Funds held under reinsurance contracts

Funds held under reinsurance contracts shall be included here.

35. Dividends payable All dividends payable shall be included here. 36. Sundry liabilities There shall be disclosed severally: (a) Derivative instruments: Derivative instruments with an

unfavourable position shall be included here;

(b) Segregated accounts companies

(c) Deposit liabilities (d) Net payable for investments purchased; and (e) The total sundry liabilities: The total of (a) to (d) inclusive


All contractual liabilities or contingent liabilities arising from off-balance sheet arrangements where these would be recognized under the insurer’s GAAP accounting standard. There shall be disclosed severally –

(a) Letters of credit; (b) Guarantees; (c) Other instruments; and (d) Total letters of credit, guarantees and other instruments. The total of

(a) to (c). 38. Total other liabilities This shall comprise the total of lines 28 to 37 inclusive 39. Total insurance business reserves and other liabilities

This shall comprise the total of lines 19, 27(c) and 38 inclusive

40. Total capital and surplus This shall be comprised of the capital and surplus total as at the end of the relevant year, as shown in the statement of capital and surplus.

41. Total This shall comprise the total of lines 39 and 40


59

INSTRUCTIONS AFFECTING THE CONDENSED CONSOLIDATED STATEMENT OF INCOME Line of consolidated statement of income

Instructions

1. Gross premiums written Gross premiums written during the relevant year and disclosed severally - (a) Direct gross premium written; (b) Assumed gross premium written; and (c) Total gross premiums written: The total of (a) and (b) inclusive.

2. Reinsurance Premiums Ceded Reinsurance premiums ceded during the relevant year shall be included here.

3. Net premiums written This shall be calculated by subtracting line 2 from line 1(c). 4. Increase (decrease) in unearned premiums

This shall be comprised of the increase (decrease) in the unearned premiums (net of prepaid reinsurance premiums or ceded unearned reinsurance premiums) from the end of the immediately preceding financial year.

5. Net premium earned This shall comprise the aggregate of lines 3 and 4.

6. Other insurance income This shall be comprised of the aggregate of all other income (such as commission and brokerage income) directly related to the underwriting general business.

7. TOTAL GENERAL BUSINESS UNDERWRITING INCOME


8. Net losses incurred and net loss expenses incurred

Net losses and loss expenses incurred shall be included here.

9. Commissions and brokerage Acquisition expenses shall be included here.

10. TOTAL GENERAL BUSINESS UNDERWRITING EXPENSES

This shall comprise the total of lines 8 and 9 inclusive.

11. Net underwriting profit (loss) – general business

This shall be calculated by subtracting line 10 from line 7.

12. Gross premiums and other considerations

The amount of gross premiums and other considerations written during the relevant year shall be included here and disclosed severally -

(a) Direct gross premiums and other considerations; (b) Assumed gross premiums and other considerations; (c) Total gross premiums and other considerations: The total of (a) and (b)

inclusive. 13. Premiums ceded All reinsurance premiums ceded and other considerations with respect to

long term business shall be included here

14. Net premiums and other considerations

Gross premiums considerations written, less amounts ceded under reinsurance contracts, during the relevant year and disclosed severally -

(a) Life; (b) Annuities; (c) Accident and health; and (d) Total net premiums and other considerations: The total of (a) to (c), or

the amount arrived at by subtracting line 13 from line 12(c).

15. Other insurance income This shall be comprised of the aggregate of all other income (such as commission and brokerage income) directly related to the underwriting long-term business.

16. TOTAL LONG-TERM BUSINESS INCOME

This shall comprise the total of lines 14(d) to 15 inclusive

17. Claims - life These shall be comprised of the amount of claims incurred under life insurance policies during the relevant year.

18. Policyholders' dividends These shall be comprised of amounts distributed or credited during the relevant year to policyholders with participating life policies.

19. Surrenders These shall be comprised of the amounts incurred during the relevant year


60

as a result of the surrender by policyholders, either for cash or in exchange for some other consideration, of policies with cash surrender.

20. Maturities These shall be comprised of the amounts incurred as a result of the maturing during the relevant year, after a specified period of time, of any endowment policy before the death of the insured.

21. Annuities These shall be comprised of the amounts incurred during the relevant year under the terms of any annuity contract.

22. Accident and health benefits These shall be comprised of the amounts incurred in respect of claims under accident and health contracts, being claims arising out of incidents occurring during the relevant year.

23. Commissions Commissions and brokerages in respect of long-term business shall be included here.

24. Other These shall include any underwriting expenses related to long-term business during the relevant year that are not included in lines 17 to 23.

25. TOTAL LONG-TERM BUSINESS DEDUCTIONS AND EXPENSES


26. Increase (decrease) in policy reserves

This shall be the increase or decrease from the end of the immediately preceding financial year in policy reserves as disclosed severally -

(a) Life; (b) Annuities; (c) Accident and health; and (d) Total increase (decrease) in policy reserves: The total of (a) to (c)

inclusive. 27. TOTAL LONG-TERM BUSINESS EXPENSES

This shall comprise the total of lines 25 and 26(d).

28. Net underwriting profit (loss) - long-term business

This shall comprise the net total of lines 16 and 27.

29. combined net underwriting profit (loss) before the undernoted items


30. Combined operating expenses (a) General and administration; (b) Personnel cost; (c) Other; and (d) Total combined operating expenses. This shall be the total of (a), (b)

and (c). 31. Combined investment income - net

Income from both general and long term business assets shall be included here. Realized and unrealised gains or losses shall be included on line 36 (a) and (b) of the consolidated statement of income, net of applicable charges,

32. Combined other income (deductions)

These shall be comprised of all income (deduction) items not assigned to any of the lines above (such as equity share in earnings of partially-owned entities). Income taxes (line 34) and realized gains (losses) (line 36) shall not be included.

33. Combined income before taxes


34. Combined income taxes (if applicable)


(a) Current: The amount provided in respect of income taxes currently payable;

(b) Deferred: The amount provided in respect of deferred income taxes; and

(c) Total: The total of (a) and (b). 35. Combined income before realized gains (losses)

This shall be arrived at by subtracting line 34(c) from line 33.

36. Combined realized and unrealized gains (losses)


(a) Realized gains (losses): This shall include gains or losses on the sale of


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investments, whether quoted or unquoted, investments in affiliates, investments in mortgage loans on real estate, real estate and derivatives. This shall also include other-than-temporary impairment charges

(b) Unrealized gains (losses): To the extent that they are recognized in the underlying GAAP Income Statement, this shall include unrealized gains or losses from investments, whether quoted or unquoted, investments in affiliates, investments in mortgage loans on real estate, real estate and derivatives. This shall also include other-than-temporary impairment charges

(c) Gains (losses) from foreign exchange transactions 37. Combined interest charges This shall include interests and other costs incurred to settle debt payments

and other obligations. 38. Net Income This shall comprise the total of lines 35, 36 and 37.

INSTRUCTIONS AFFECTING THE CONDENSED CONSOLIDATED STATEMENT OF CAPITAL AND SURPLUS

Instructions [Note: The numerals in bold type and letters in bold type in parentheses refer to the numbers of the line of the consolidated statement of capital and surplus]

1(a). Capital Stock This shall comprise of all called up share capital or shares. (a). (i). Common stock This shall comprise of all common shares. (ii). (A) Preferred shares This shall be comprised of all preferred shares. Further the aggregate

liquidation value shall be disclosed. (B) Preferred Shares issues by a subsidiary This shall be comprised of all preferred shares issued by the insurer. Further

the aggregate liquidation value shall also be disclosed.

(iii). Treasury shares

This shall be comprised of treasury shares.

(b). Contributed surplus

This shall comprise additional paid in capital or contributed capital in excess of par. Contribution made to additional paid in capital from shareholders shall be added to this line and distributions to common shareholders shall be deducted from this line.

(c). Total capital

This shall comprise the total of lines 1(a) and 1(b) 2(a). Surplus - beginning of year This shall comprise equivalent to retained earnings (deficit) and accumulated

other comprehensive income (loss) at beginning of year or equal to the preceding year’s surplus – end of year balance.

(b). Income for the year

This shall comprise the amount on line 40 of the Consolidated Statement of Income.

(c). Dividends paid and payable

This shall be comprised of all dividends declared during the relevant year, including whether such dividends were or were not paid before the end of the relevant year.


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(d). Change in unrealized appreciation (depreciation) of investments

This shall be comprised of any increase or decrease occurring since the end of the immediately preceding financial year in the value of quoted investments (line 2 of the consolidated balance sheet), to the extent that that increase (decrease) is not reflected in the statement of income.

(e). Change in any other surplus

This shall be comprised of any change in retained earnings not included from 2(b) to (f). This line may also include change in accumulated other comprehensive income (loss) during the relevant year. This may also include any effect of adoption of an accounting standard

(f). Surplus – end of year

This shall comprise the aggregate of lines 2(a) to 2(e).

3. Minority interest

This shall be comprised of a portion of the investments in partially-owned entities that is not owned by the insurance company or belonging to minority shareholders. This is also called a “non-controlling interest”.

4. Total capital and surplus

This shall comprise the total of lines 1(d), 2(h) and 3.

insurance account rules 2016€¦ · instructions affecting the statutory statement of capital and...

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